Dim outlook so analysts cut growth forecasts
Private sector economists have cut their growth forecasts for this year and the next amid a lacklustre global outlook, according to a new survey.
Growth is expected to come in at 1.4 per cent this year, down from an earlier forecast of 1.8 per cent, according to economists polled by the Monetary Authority of Singapore (MAS) in its latest quarterly survey released yesterday.
This comes as sectors like finance and insurance, construction, and wholesale and retail trade are expected to grow at a slower pace than previously anticipated.
The MAS survey reflects the views of 22 analysts who monitor the Singapore economy.
The Ministry of Trade and Industry had said in its latest economic report that growth for the year should come in at between 1 per cent and 1.5 per cent.
CIMB Private Bank economist Song Seng Wun said that while the manufacturing sector - in particular, electronics - has shown signs of picking up, "we're watching out for services where we have seen weaknesses across the board".
The service sector, which makes up two-thirds of the economy, recorded flat growth in the third quarter, moderating from the 1.2 per cent expansion in the previous three months.
However, financial services might help provide a boost in this quarter, said Mr Song, who expects full-year growth to come in at 1.5 per cent.
"Trading volumes have been up across many asset classes in the wake of the United States presidential election results, and other developments related to Mr Donald Trump," he noted.
We’re watching out for services where we have seen weaknesses across the board.Mr Song Seng Wun
Still, Mr Song said the subdued labour market is weighing on sentiment and consumer spending.
Manpower Ministry data this week showed that layoffs reached 13,730 in the first nine months of this year, the highest for the period since 2009.
Survey respondents expect the economy to grow marginally faster at 1.5 per cent next year, also a downgrade from previous predictions of 1.8 per cent growth.